Medicaid Expansion Choices Mean Different Care for Poor Diabetics, Depending on Where They Live

Published Online: May 20, 2014

Peter Page

Patients with diabetes, and public health efforts to combat the rising incidence of the disease, have starkly different prospects in states that have expanded Medicaid eligibility under the Affordable Care Act (ACA) compared with patients and programs in states that do not.

The 2012 US Supreme Court ruling that generally upheld the constitutionality of the ACA struck down a provision penalizing states that do not expand Medicaid to all adults earning no more than 133% of the federal poverty level, plus 5% set aside for cost sharing, which came to $15,415 for an individual or $26,344 for a family of 3 in 2012. If expanded to all 50 states, Medicaid would be covering an additional 21.3 million people by 2022, a 41% increase compared with Medicaid before passage of the ACA. Almost all the newly eligible are adults.1

Nearly half the states,2 including 7 of the 10 reporting the highest diabetes prevalence to the CDC in 2012, have chosen to not expand Medicaid.3 A Harvard study found that, among many health consequences, these state-level decisions mean that more than 400,000 diabetics will not get care they could otherwise receive.4

The ACA allocates to states 100% federal funding to expand Medicaid, a change that took effect January 1, 2014. Federal funds will continue paying the entire cost of the expansion through 2017, and 90% of the cost thereafter. Arguments against expanding Medicaid have been a mix of concern about long-term costs and an expressed philosophy that government programs should not grow. Most states where Medicaid did not immediately expand have Republican governors—1, Arkansas, has a Democratic governor and a Republican legislature, and had a protracted debate toward a “private option” that has allowed new Medicaid recipients to use federal funds to purchase private insurance.5

Representative of the Republican governors opposing Medicaid expansion is Bobby Jindal of Louisiana, who claims to be the first governor to do so. His op-ed in The Times Picayune of New Orleans stated that Medicaid expansion would have cost Louisiana taxpayers $1.7 billion over 10 years. “Expansion would result in 41% of Louisiana’s population being enrolled in Medicaid. We should measure success by reducing the number of people on public assistance. But the Left has been very clear: their goal is to transform all healthcare in America into government-run healthcare,’’ he wrote.6

Across the nation, the Medicaid provision would have expanded coverage to 16 million adults previously excluded. The decision by some states not to expand means that 3.6 million people will remain uninsured, and the affected states will not receive $8.4 billion in federal payments.7

The Harvard study, “Opting Out of Medicaid Expansion: The Health and Financial Impacts,” determined that state-level decisions to not expand Medicaid will result in 422,553 diabetics not receiving medication. Also, 712,037 persons with undiagnosed depression will not receive mental health screening, an estimated 240,700 individuals will suffer catastrophic medical expenditures that otherwise would have been covered, 195,492 women aged 50 to 64 years will not receive mammograms, and 443,677 women aged 21 to 64 years will not receive the Papanicolaou test (Pap smear). Full expansion “would have resulted in an additional 658,888 women in need of mammograms gaining insurance, as well as 3.1 million women who should receive regular Pap smears,’’ the study found.4

Most sobering of all, the study projected between 7115 and 17,104 deaths attributable to the lack of Medicaid expansion in opt-out states.4 In Florida, where Republican governor Rick Scott called for a limited expansion of Medicaid8 but faced resistance from the legislature, the media has reported on the death of a young uninsured woman from a diagnosed heart condition she could not afford to have treated.9

Krista Maier, associate director of public policy for the American Diabetes Association, noted that states declining to expand Medicaid are effectively closing off health insurance to some of their poorest residents. The ACA assumed everyone earning 133% or less of the federal poverty level would be enrolled in Medicaid, so the law does not provide tax credits to purchase insurance on exchanges to persons earning less than 100% of the federal poverty level.4

“We fully support states accepting the federal funding; otherwise the poorest people have no viable option for acquiring,’’ she said.

The states with the most restrictive income eligibility for Medicaid still must enroll the poor who become disabled, Maier noted.

“When you can’t afford the care to manage your disease, you scale back the care. Without adequate care, you increase risk of complications,’’ she said. “The states that don’t expand Medicaid are, essentially, waiting for the person to become so sick they are disabled to be eligible. If they expanded eligibility these people could receive care before they are disabled.’’

A Movement Toward Prevention

According to the Trust for America’s Health and the Robert Wood Johnson Foundation,10 the 10 states with prevalence of type 2 diabetes mellitus (T2DM) above 11% are West Virginia, Mississippi, Alabama, Louisiana, Tennessee, Ohio, South Carolina, Oklahoma, Florida, and Arkansas. Louisiana, Alabama, and Mississippi each top 12%, while West Virginia has the unwanted first place spot with 13%. Of the 10 states, only West Virginia, Ohio, and Arkansas are expanding Medicaid.2

Under current cost-sharing formulas, Medicaid expansion is a bargain for the states. A study by the Kaiser Family Foundation calculated that if every state expanded Medicaid, cumulative state Medicaid spending would increase by $76 billion from 2013 to 2022, while federal Medicaid spending would increase by $952 billion. Some states would enjoy decreases in Medicaid spending while states with the largest populations of poor, uninsured people would shoulder “relatively small increases in spending.’’1

While expanding Medicaid appears inexpensive for states, studies show that refusing the influx of federal funds is costly. Texas, the largest opt-out state, would have to spend $15 billion over 10 years as its portion of increased Medicaid spending, but the state, local governments, and hospitals will spend about that much anyway on adult healthcare that would be covered by Medicaid, if expanded. Local taxpayers across the Lone Star State already spend $2.5 billion for indigent care, inpatient hospital care for jailed individuals, and charity care, most of which the expansion would cover. Texas hospitals write off $1.8 billion in unreimbursed charity care, some of which funds individuals that Medicaid would cover under an expansion.11

Kentucky, with a 10.7% diabetes prevalence, is expanding Medicaid. An analysis commissioned by the Cabinet for Health and Family Services found, aside from “tremendous benefits for the health of hundreds of thousands of Kentuckians,” that “It would cost Kentucky more’’ to not expand Medicaid eligibility than to accept the federal money. The analysis, done by Price WaterhouseCooper and the University of Kentucky, concluded that expanding Medicaid would pump $15.6 billion into the state economy between this year and 2021, create 17,000 new jobs, and have a net positive impact on state and local government budgets of $802 million over the same period. The report estimated the cost of care for Kentucky’s uninsured population at $1.1 billion annually, with costs spread to government, hospitals, public clinics, and patients or their unpaid doctors.12

Governor Steve Beshear has decried Kentucky’s poor health statistics as not only morally unacceptable but also as a barrier to lifting large portions of the commonwealth out of poverty.13 The state ranks first among the 50 states in mortality and at or near the top for mortality from cancer, where it ranks first; cardiovascular disease, where it ranks fourth; heart disease, where it ranks fifth; and stroke, where it ranks twelfth. Kentucky is 50th among the states in per capita income and 5th in percent of the population earning under the federal poverty level. Prior to Medicaid expansion, 600,000 residents lacked health insurance.9,10 Diabetes prevalence among adults in Kentucky has tripled from 3.5% in 1995 to 10.7% of the population in 2012, said Theresa Renn, coordinator of the state’s Diabetes Prevention and Control program.

Diabetes is a costly disease to treat. Medicaid spending on persons with diabetes averages $14,229, versus $4568 on those without diabetes.14

“We know many people have diabetes many years before diagnosis and diabetes prevalence tends to be higher in the Medicaid population, so Medicaid expansion will probably increase the number of people we see, but the number of hospitalizations and complications will go down,’’ Renn said.

The ACA contains several provisions to encourage state Medicaid programs to reimburse for diabetes screening, prevention, care, and treatment.3 John Langefeld, MD, medical director of the Kentucky Department of Medicaid Services, said in an e-mail that the state is exploring how to utilize incentives within the ACA to expand prevention services for diabetes and other chronic diseases.